The Canon Corporation sells ten copiers to the Title Company on October 15 for $40,000. Canon delivers the copiers to Title on October 20; Title pays $16,000, and agrees to pay the balance on November 10.
-Under the cash basis,how much revenue should Canon recognize in October?

Question

Quizplus · Accepted Answer

Under the cash basis accounting method, revenue is recognized when payment is received. Since Title Company paid $16,000 for the copiers in October, Canon can recognize $16,000 as revenue in October. The remaining balance of $24,000 will be recognized in November when Title Company pays it.

The Canon Corporation Sells Ten Copiers to the Title Company